Ending Well

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I was at the Cleveland Browns v Pittsburgh Steelers game last Thursday night. The one that didn’t end well. How unfortunate for Cleveland, a great sports town and a storied franchise. The great Jim Brown, in attendance, could not have enjoyed the game-ending brawl and the behavior by some of the players. How will this impact the rest of their season?

It is so important to end well, much more important than it is to start well. This is so true in sports, but it matters in most things.

How will the impeachment proceedings end? Will it help our country or further polarize it? No shortage of opinions on that topic…

How will the ever-increasing global debt situation end? Will there be a global economic meltdown, or can we kick the can down the road in perpetuity? I would venture to say that no one really knows, and that is worrisome.

What about trade negotiations between the U.S. and China? How will they end?

And finally, how will this record-long economic expansion end? Many believe it will end badly, due to some policy mistake or 2020 election outcome not to their liking. I can certainly relate to those concerns.

With barely a month to go before the end of the year, the stock market continues to set new highs. Corporate stock buy-backs, and historically low interest rates are two of the primary drivers to what has been an outstanding year in the stock market. But there is something else driving the stock market. Something subtle, yet powerful, that is pushing the market higher. In a nutshell, this force is the stubbornly-high level of fear and anxiety that lurks below the surface in most people’s mind. Given the adaptability and resiliency of our country, both economically and in everyday life, reality continues to unfold in defiance of our worst fears. A leading economist, Ed Yardeni, calls this the most despised bull market in history. He may be right. Yet, the stock market rarely stops rising when fear and anxiety are the dominating emotions. Economic statistics and company fundamentals always matter in terms of stock valuations and the health of the stock market. But, in periods of heightened anxiety, they can be pushed aside as critical market drivers. Currently, we seem to be in that type of situation. In our view, it is definitely a time to be cautious, disciplined and patient.

Perhaps this is a time for reflection. What would define an ideal ending for ourselves and our country? We all want financial security. We all want some level of freedom to pursue our dreams, while most understand there has to be a balance between individual rights and civic responsibility. Most, as they age, want to give back and leave a positive legacy for those who follow. I know there are many other outcomes people desire, but I think I’ve listed some of the most important ones.

So, how do we make this all happen for ourselves and for others? We can’t think about this or approach it in a vacuum. What we do and even how we think affects others. We are connected, even if we don’t realize how. In my mind, that really has to be the starting point. A realization that we are all in this together. Environmentally, economically, politically, civically, and even spiritually, we are connected to each other.

I’m wondering if the fear and anxiety prevalent today is made worse by a sense of disconnection. Is our dependence on smart phones and addiction to social media part of the problem? That might be a topic worth exploring in a future edition of Willingdon Views.

In the meantime, we shoulder on, striving, searching, wondering, and hoping that it will all end well.

Michael Kayes, CFA

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